Residential properties: Why are investors still buying?

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Residential properties: Why are investors still buying?

Postby Stradlinz » Sun Mar 06, 2011 12:18 pm

Stradlinz
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Re: Residential properties: Why are investors still buying?

Postby Dennis Ng » Sun Mar 06, 2011 8:15 pm

Stradlinz wrote:For your reading pleasure

http://www.todayonline.com/Commentary/E ... ill-buying


the investors that are buying NOW, are they the novice investors or the experienced investors? More like the former to me. None of my sifus and myself are considering to buy any properties now.

This Mr Ku Swee Yong is the founder of real estate agency International Property Advisor (IPA), which provides services to high net worth individuals, did not factor in the possibility of interest rate going up to 4%, and if it does, what is the monthly instalment, what a "good & unbiased" property advisor?
Cheers!

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Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
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Postby Stradlinz » Mon Mar 07, 2011 12:53 am

Yes the report is on the biased side. Anyway I'm sure many forummer here are confused on why property prices still firm even after the latest measures.

So the important thing is to understand the phycology of the masses on why are they still investing. Personally I also felt now not a good time to enter the market.
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Postby Dennis Ng » Mon Mar 07, 2011 9:08 am

Stradlinz wrote:Yes the report is on the biased side. Anyway I'm sure many forummer here are confused on why property prices still firm even after the latest measures.

So the important thing is to understand the phycology of the masses on why are they still investing. Personally I also felt now not a good time to enter the market.


As more and more people think that property prices in Singapore can only go up and not come down, as more and more people become more confident about Property, I become more and more cautious.

Be Greedy when Others are Fearful. Be Fearful when Others are Greedy.
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
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home buyer vs investor

Postby sheiwah » Mon Mar 07, 2011 11:28 am

i suspect there is a real pent up demand from home buyers. most will not read too much into the various aspects of "investing" when buying a home.

for the month of feb, i think the transaction vol has dropped but not the prices, well at least it's not rising.

but dennis's advice on upside, downside risk and 4% rule are good rules to adhere.
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Re: home buyer vs investor

Postby Dennis Ng » Tue Mar 08, 2011 11:56 pm

sheiwah wrote:i suspect there is a real pent up demand from home buyers. most will not read too much into the various aspects of "investing" when buying a home.

for the month of feb, i think the transaction vol has dropped but not the prices, well at least it's not rising.

but dennis's advice on upside, downside risk and 4% rule are good rules to adhere.


so the IMPORTANT question is are the "investors" buying Astute Investors or Novice Investors? My observation is it is mainly Novice Investors that are still buying properties...
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
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Postby ngtfook » Wed May 04, 2011 11:45 pm

sharing a good article about potential property bubble.


Is S’pore facing bubble trouble?
CNBC.COM, On Sunday 1 May 2011, 23:43 SGT
Fed chief Ben Bernanke's pledge to keep interest rates low for an extended period may have cheered the stock markets but one economist cautions it may be fueling a property bubble in Singapore.

Singapore property prices rose 17 percent last year after a 25 percent decline during the recession in 2009. Analysts are growing increasingly worried about property prices and the government has tried repeatedly to cool the sector.

"For now, the party is on, everybody is enjoying it, it's only when the party is over (that) you have a hangover tomorrow morning," Jimmy Koh, executive director and head of research at UOB told CNBC on Thursday.

Koh pointed to the relatively low debt-servicing ratio in Singapore as an indicator he is watching. The ratio currently stands at 20 to 30 percent of household income, compared to the 60 to 90 percent levels seen in 1996, when UOB's data series began. The low debt ratio was largely due to low interest rates, according to Koh. Mortgage rates in Singapore stand at less than 1.5 percent currently, far lower than the 6 to 8 percent rates in the late nineties.

"When (the) interest rate environment does change, that indicator will change and that will determine whether we are in a bubblish mode," Koh said, highlighting that for every 1 percentage point rise in interest rates, debt servicing would go up by 3.5 percentage points.

While he does not see mortgage rates in Singapore heading back to the 6 percentage range seen in 1996, Koh thinks people will start getting a lot more cautious when interest rates hit 2 or 3 percent.

Markets are expecting the U.S. Federal Reserve to begin raising interest rates in the early part of 2012. That would have a direct impact on interest rates in Singapore, since the benchmark Singapore interbank overnight rate (SIBOR) tracks rates in the U.S.

Another factor UOB's Koh said he was watching was the lagging supply of property projects. By 2013, a substantial supply would come onstream. That, coupled with potentially higher borrowing costs in 2012, could prove to be a double whammy for the property market in the city-state.
Price is what you pay; Value is what you get
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Postby Dennis Ng » Wed May 04, 2011 11:54 pm

ngtfook wrote:sharing a good article about potential property bubble.


Is S’pore facing bubble trouble?
CNBC.COM, On Sunday 1 May 2011, 23:43 SGT
Fed chief Ben Bernanke's pledge to keep interest rates low for an extended period may have cheered the stock markets but one economist cautions it may be fueling a property bubble in Singapore.

Singapore property prices rose 17 percent last year after a 25 percent decline during the recession in 2009. Analysts are growing increasingly worried about property prices and the government has tried repeatedly to cool the sector.

"For now, the party is on, everybody is enjoying it, it's only when the party is over (that) you have a hangover tomorrow morning," Jimmy Koh, executive director and head of research at UOB told CNBC on Thursday.

Koh pointed to the relatively low debt-servicing ratio in Singapore as an indicator he is watching. The ratio currently stands at 20 to 30 percent of household income, compared to the 60 to 90 percent levels seen in 1996, when UOB's data series began. The low debt ratio was largely due to low interest rates, according to Koh. Mortgage rates in Singapore stand at less than 1.5 percent currently, far lower than the 6 to 8 percent rates in the late nineties.

"When (the) interest rate environment does change, that indicator will change and that will determine whether we are in a bubblish mode," Koh said, highlighting that for every 1 percentage point rise in interest rates, debt servicing would go up by 3.5 percentage points.

While he does not see mortgage rates in Singapore heading back to the 6 percentage range seen in 1996, Koh thinks people will start getting a lot more cautious when interest rates hit 2 or 3 percent.

Markets are expecting the U.S. Federal Reserve to begin raising interest rates in the early part of 2012. That would have a direct impact on interest rates in Singapore, since the benchmark Singapore interbank overnight rate (SIBOR) tracks rates in the U.S.

Another factor UOB's Koh said he was watching was the lagging supply of property projects. By 2013, a substantial supply would come onstream. That, coupled with potentially higher borrowing costs in 2012, could prove to be a double whammy for the property market in the city-state.


Hi all,

my seminar graduates will be familiar that I always suggest people to use 4% interest rate for Housing Loan calculations.

For instance, for my S$760,000 Home Loan on my Investment property, at current interest rates of 1.2%, my monthly instalment is about S$2,500. If interest rates is at 4%, the monthly instalment would go up to S$3,700 or S$1,200 more.

To mitigate risks, I have set aside about S$50,000, more than enough to pay for 12 months of Housing Loan instalments based on 4% interest rate, which means even if my investment property is NOT rented out for 12 months and interest rates go up to 4%, I'll be financially ok.
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng
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Posts: 9781
Joined: Tue Nov 29, 2005 7:16 am
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